Feb 04, 2018

Acknowledgements

  • Michael Brady
  • Kirti Rajagopalan
  • Jennifer Adams
  • Chad Kruger (CSANR)

How do we measure a causal effect?

Previous Attempts

An excellent review is Blanc and Reilly (2017).

  • Mendelsohn, Nordhaus, and Shaw (1994): farmers adapt to changes by switching crops or implimenting new technologies.

  • Schlenker and Roberts (2009): Yields decline sharply and non-linearly.

Mendelsohn, Nordhaus, and Shaw (1994)

Schlenker and Roberts (2009)

Data

  • 6km grid of daily t-max, t-min, and precip. Historical: 1979-2015, Projected: 2006-2099 (Adam Lab).
  • County level: ag land rent, crop and pasture acres, soil characteristics, irrigated acres, income, population (NASS, census)

Naive matching

Matching provides a method of balancing climate covariates \(Z\) between treatment and control groups.

If \(c(i)\) is the control that minimizes \(\min \limits_{j} d(X_i, X_j)\) for some distance metric \(d\), then a matching estimator is

\[\hat{\tau}_{1p} = \frac{1}{N_1} \sum \limits_{i \in N_1} (Y_{i,1} - Y_{c(i), 0}),\]

where \(Y_{i,1}\) is the treated observation and \(Y_{c(i),0}\) is the matched control observation (Imbens and Rubin 2015).

Distance metrics

  • Propensity score matching: good at minimizing distance along a single dimension that is a combination of all covariates.

  • Mahalanobis distance matching: good at minimizing the sum of distances between individual covariates.

  • Genetic matching: search space over a weighted combination of the two (Sekhon 2011).

Issue: Multiple causal mechanisms

Potential Solution

Decompose mechanisms specifically:

  • Yield
  • Adaptations (double-cropping, wind-tunnels, fans, cooling methods)
  • Crop choice

References

Blanc, Elodie, and John Reilly. 2017. “Approaches to Assessing Climate Change Impacts on Agriculture: An Overview of the Debate.” Review of Environmental Economics and Policy 11 (2). Oxford University Press (OUP): 247–57. doi:10.1093/reep/rex011.

Imbens, Guido W, and Donald B Rubin. 2015. Causal Inference in Statistics, Social, and Biomedical Sciences. Cambridge University Press.

Mendelsohn, Robert, William Nordhaus, and Daigee Shaw. 1994. “The Impact of Global Warming on Agriculture: A Ricardian Analysis.” The American Economic Review. JSTOR, 753–71.

Schlenker, Wolfram, and M. J. Roberts. 2009. “Nonlinear Temperature Effects Indicate Severe Damages to U.s. Crop Yields Under Climate Change.” Proceedings of the National Academy of Sciences 106 (37): 15594–8. doi:10.1073/pnas.0906865106.

Sekhon, Jasjeet S. 2011. “Multivariate and Propensity Score Matching Software with Automated Balance Optimization: The Matching Package for R.” Journal of Statistical Software 42 (7): 1–52.